Demands for accountability from Kulluna Irada have intensified over its actions in recent years, particularly since the 2019 financial crisis. This includes the decision by former Prime Minister Hassane Diab's government to declare Lebanon bankrupt, its failure to repay debts, and its role in destabilizing the country's monetary and financial systems. Several depositors' associations have accused Kulluna Irada of collaborating with former Deputy Prime Minister Saadeh Chami to dismantle Lebanon's banking sector and bankrupt Lebanese banks, after granting licenses to new banks in the Lebanese market.
Kulluna Irada advocates for a set of principles it deems crucial for restoring financial stability. However, experts contend that these principles are detrimental to the economy, public trust, and the banking sector, and, most significantly, they threaten the interests of depositors. Among its proposals, Kulluna Irada seeks the abolition of the banking secrecy law, the cancellation of debts without imposing any burden on the state or its public assets, and the cancellation of Lebanon's Central Bank’s (BDL) obligations to the banks—obligations that, in essence, belong to the depositors themselves.
The Consultative Council swiftly opposed the plan devised by Saadeh Chami in coordination with the Kulluna Irada group, which proposed the cancellation of a significant portion of BDL’s foreign currency obligations to banks, amounting to approximately $70 billion. These obligations effectively represent deposits from private bank depositors. The goal was to reduce the deficit in BDL’s capital and close its net open foreign currency position. On February 6, 2024, the Consultative Council issued Decision No. 209/2023-2024, effectively dismantling the core of the "Chami–Kulluna Irada" government's plan.
The aim here was to prevent banks from fulfilling their obligations to return deposits on demand without delay, as required by Articles 690 and subsequent provisions of the Obligations and Contracts Law. Such a failure would constitute a breach of the professional duties banks owe to safeguard the rights and funds of depositors, ensuring that deposits are returned in a way that guarantees full repayment, without harm or loss. This would allow depositors to access, use, and invest their funds productively. The plan proposed by the previous government represents a clear and outright violation of constitutional principles, international agreements, and national laws, including the Money and Credit Law and the Obligations and Contracts Law.
Kulluna Irada does not recognize that the crisis in Lebanon is a systemic one that requires the state to bear responsibility for all its legal obligations, particularly when it comes to covering the debts on BDL’s balance sheet. This would place the responsibility back on the state and its central bank to return all deposits from BDL to the commercial banks, ensuring full reimbursement to depositors. For Kulluna Irada, however, the banks are seen as the primary culprits of the crisis, and the distribution of losses should start with the banks’ capital and private assets. This would inevitably result in the collapse of the current banking institutions and the loss of the remaining deposits.
Kulluna Irada members defend the idea that state assets are sacred and should not be used to solve the crisis, while deposits are not, since depositors represent only a minority of the population. They believe that the people's money should not be used to cover their losses, and that depositors, likened to the privileged or corrupt, could be sacrificed without scruple.
In short, the proposal to eliminate the state's debt by erasing deposits and dismantling the banking system to create alternative banks—outlined in the plan of Hassane Diab's government—has resurfaced. This brings to the forefront the staunch defense by Albert Kostanian, Henri Chaoul, Diana Menhem, Karim Bitar, and others, who justified the default on bond payments carried out by Diab's government. This decision, which favored a cash-based economy, led to over $14 billion in losses by the central bank due to subsidies being funneled out of the country. These same individuals also celebrated the populist judicial rulings that allowed for the repayment of around $45 billion in loans granted by banks to the private sector for less than $5 billion, using an exchange rate of 1,500 Lebanese pounds to the dollar or through checks in "lollars." This ultimately resulted in the depletion of millions of depositors' savings.
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